Account Takeover Attack: Fraud Toolkits Bypassing UPI Security in Mobile Apps

India’s digital payment ecosystem has transformed the way financial transactions are performed. Today, millions of transactions are performed instantly and securely using UPI (Unified Payments Interface). But, how secure are these transactions really? Cyber fraud has evolved, bypass and repackaging toolkits are now easily available to attackers. Because of this, attack methods targeting mobile devices and applications are also evolving, making it easier to bypass traditional security controls.

According to a report by The Telegraph, a fraud toolkit known as the ‘Digital Lootera’ is being distributed through Telegram groups. The toolkit manipulates Android devices and bypasses the SIM-binding trust mechanism used by many payment applications. Researchers warn that such attacks could lead to large-scale Account Takeover (ATO) incidents.

What is an account takeover attack?

Account takeover (ATO) attack is a form of cyber fraud where attackers gain unauthorised access to a user’s account, such as banking, e-commerce, or social media accounts. Once attackers control the account, they can perform fraudulent transactions or misuse the user’s data.

To prevent such attacks, many payment and UPI applications rely on a security mechanism called SIM binding. SIM binding ensures that a user’s bank account is linked to the SIM card and phone number present in the user’s device. When a user registers for UPI services, the application verifies the phone number by sending an SMS from the device. If the SIM card matches the registered number, the application assumes that the request is coming from the legitimate user.

Security validation check to prevent account takeover

In addition to SIM binding, UPI applications implement several security validation checks, including:

1. SIM binding verification: Ensures that the registered mobile number is present in the user’s device.
2. SMS-based OTP authentication: Sends a one-time password to verify users.
3. Auto-read OTP authentication: The app auto-detects OTP from the device; no manual input is required.
4. Device identity validation: Check that the request originates from the registered device.
5. Application signature checks: Verify the app’s digital signature to ensure the application is unmodified.

These controls are implemented to prevent account takeover attacks, but malware toolkits may bypass them by manipulating the Android runtime environment or app communication so that the application falsely believes the request is coming from the legitimate device and SIM, leading to SIM binding abuse.

How attackers perform account takeover in the UPI application

For account takeover, attackers often trick users into installing a malicious APK disguised as legitimate content, such as a traffic challan or event invitation. Once installed on the victim device, the app runs in the background and requests permissions to access SMS messages or uses accessibility services. The malware can intercept OTPs or banking messages and forward them to the attacker’s server in real time. In some cases, it may also hide or delete these messages from the user’s device to avoid detection.

Using the intercepted OTPs, attackers can complete authentication or registration flows on their own devices, leading to account takeover and enabling unauthorised access and transactions.

Such frauds are increasing every day, and traditional security controls are often bypassed easily because apps can run on rooted or tampered devices. The API security is being bypassed due to weak SSL pinning.

What if these mobile applications have their own security solution that operates inside the application, rather than relying solely on external defence? Preventing applications from running on rooted or compromised devices can significantly reduce the likelihood of these attacks. This is critical for mitigating account takeover (ATO) in UPI applications.

This is where advanced runtime application self-protection is important for financial applications.

Bugsmirror Defender (RASP solution) and Bugsmirror Shield (an anti-reverse engineering tool) provide a multi-layered approach to securing mobile apps against these modern attack techniques.

How Bugsmirror Defender and Shield address major risks leading to account takeover:

• When integrated into the application, Bugsmirror Defender (advanced RASP solution) prevents the app from running on rooted devices or devices with malicious tools such as Frida or Magisk, reducing the chances of security bypass and unauthorised access.

• Bugsmirror Defender implements SSL pinning, which prevents Man-in-the-Middle attacks and protects from API capturing, by which attackers manipulate information in communication channels.

• Bugsmirror Shield hardens app code beyond basic obfuscation using encryption, transformation and virtualisation techniques, making it harder for attackers to reverse engineer the app or extract sensitive information.

• Additionally, Bugsmirror Defender implements 45+ runtime security checks to detect and prevent such attacks in real time. With no code integration, CI/CD pipeline support and Over the Air (OTA) Updates, it is one of the best Rasp solutions to prevent runtime attacks.

An account takeover fraud case Bugsmirror investigated previously

The report of the threat ‘Digital Lootera’, is not new. Bugsmirror investigated a same unexplained financial anomalies in a large UPI payment platform with over 10 crore users. Despite standard security controls like SIM binding, OTP authentication, and device verification, attackers were able to exploit weaknesses in the device–SIM trust at the application layer.

Through red teaming assessment using ThreatLock, Bugsmirror identified how attackers operated within authenticated sessions and initiated seemingly legitimate transactions. The organisation faced the issue of account takeover, which is currently again a great concern. Bugsmirror detected the issue and strengthened the organisation's app security through Bugsmirror Defender and Shield and helped it to regain its reputation.

To learn about this case, read more here: Account Takeover: Detecting Real-World Cyber Risk in a Large-Scale UPI Payment App

Conclusion

As UPI adoption grows, attackers are increasingly targeting weaknesses in mobile application environments rather than backend systems. Security mechanisms such as SIM binding and OTP verification alone are no longer sufficient against advanced runtime manipulation attacks. Fintech organisations must adopt application-level protection, such as runtime threat detection and app hardening, to prevent large-scale account takeover attacks.

To find out threats that can lead to such cyber attacks, a red teaming assessment with Bugsmirror threatLock will help you identify them before attackers. As mobile payments continue to grow, proactive security measures are necessary. If you want to protect your mobile app from such attacks, the Bugsmirror App shielding solution is the right choice. With a simple integration, it protects the app from runtime threats without any interference with the app's functionality.

Identify how attackers could exploit your app with Bugsmirror ThreatLock Red Teaming assessment and strengthen protection with Bugsmirror Defender runtime security.